Dave Mosley: Yes, thanks. I don’t think of things that way that people in data centers are not making decisions like you would make for example, if you’re building your own PC, this or that or this combination. Instead, they know how to manage data across multiple tiers and geographies very, very well. And make sure that the right data gets the right place at the right time. There are some gen AI discussions that are very transactional and probably don’t need a whole lot of HDD and then there’s a lot that are very video-intensive and want data to be sequestered in a certain tank and so that nothing else can touch it. And we believe that’s going to be that normal tier that you see today. So, I think it’s a win-win for memory and storage long-term.
Obviously, it’s win for compute. And I think as some of these new applications are lit up, I’m really excited to see it. We haven’t seen it yet. I mean, unless you start to look back at some traditional cloud service provider capabilities and say that all along that was AI. But I do think there’s a whole host of new tools coming. It will be a very competitive space. And the data tiering infrastructure will become a critical part of that as we go forward.
Operator: The next question comes from Karl Ackerman with BNP. Please go ahead.
Karl Ackerman: Yes. Yes, thank you. I have two questions. First, I may have missed this, but why did average capacity per drive for the mass capacity area of your business shrink this quarter? And then second, I guess, how should we think about mass capacity unit growth from here? And where do you believe we are in the replacement cycle and whether that should continue to elongate or whether that returns to some form of normal from a unit perspective? Thank you.
Dave Mosley: Yes, thanks, Karl. So the – we are not overbuilding, especially the high capacity drives are trying to push out into some of the cloud service providers. We’re waiting until the inventory actually goes down. And so I think that’s why, and I made reference to this earlier, that’s why some of the metrics may look weird, like you just pointed out on capacity per drive diving down. I don’t think that’s a long-term trend either. I think of course that’s going to go back up.
Gianluca Romano: Yes. The average capacity is down because of mix. So as I said before, in the June quarter, we shipped less to cloud and more to VIA, and of course the capacity is much higher in the cloud business.
Dave Mosley: I’m sorry, Karl, what was the second part of your question?
Karl Ackerman: Yes, sorry about that. It’s about how we should think about mass capacity unit growth from here? And where do you believe we are the replacement cycle?
Dave Mosley: Okay.
Karl Ackerman: I asked because it appears your mass capacity unit shipments peaked in the first quarter of 2022. So it’s been about five consecutive quarters of a decline. At the same time, units are down over two thirds in that same period. And so if we could just discuss perhaps the corollary between units and exabyte growth, I think it’s relevant here would be helpful? Thanks.
Dave Mosley: Good. There are hundreds of, sorry, hundreds of millions of cloud drives, if you will, in data centers around the world. And some of them are aging to your point. And if unit shipments go down, its exabytes can still go up even though unit shipments are going down because the ones that are aging off are lower capacity points, say fours, eights, 12 terabytes, whatever. But over time it’s much more efficient, actually it’s more efficient power-wise and for all a lot of other features system level features to put the newer drives on. So it’s about all these things in balance. And I do believe that unit shipments are down largely because of this inventory digestion that we’ve been talking about. That will turn, again, will it go back to the peak of where it was five or six quarters ago and how fast will it go back?
